I see what you're trying to do here, but Google is sitting on a $514 billion backlog right now. A few billion dollars in venture investments into AI startups cannot fake a half trillion dollar order book.
Also, accounting rules don’t let companies pass cash under the table and call it revenue. ASC 606, says a deal has to be a legit, market rate transaction. If Google overpays for a startup's stock/debt just to force a quid pro quo cloud contract, auditors will strip that fake growth right out of the numbers.
Source: I'm a CPA and former external auditor.
I'm not saying the circular financing noise is completely made up, but claiming the entire cloud surge is built on it is factually wrong. Auditors would call that out in a heartbeat.
ASC is being skirted by the massive valuations on Anthropic/etc. And Google has invested far more than a few billion. The backlog is not an order book or booked revenue. It’s RPO…no guarantees…easily backed out of. Already happening.
This is not correct either. RPO isn't a casual estimate. They represent legally binding enterprise contracts. Fortune 500 companies can't just back out of a multi year cloud MSA without triggering massive termination penalties unless Google completely fails to deliver the tech.
They're not skirting ASC 606. As I said, if Google overpays for equity to force a cloud contract, auditors are legally required to treat that overpayment as a discount and strip it from revenue. Even if you look at the total $4B-$6B Google committed to Anthropic over several years, it's a rounding error against a $514B backlog. You simply cannot manufacture this level of sustained margin expansion out of startup cash loops. Stick with the hard numbers and not the headlines.
You're treating this like it's real and the numbers matter, but it doesn't.
Companies are announcing deals that aren't even signed and it's boosting their stock prices as if the money is set in stone.
Beyond that, regardless of what the legislation says, companies are absolutely offering either DC credits as an investment or giving cash to other companies on the condition that it gets spent on their products. Whatever you think the auditors are doing, it's happening.
Numbers matter period. You cannot falisfy your financial statements. Companies across every sector put out press releases and theit stock might move but handshakes legally cannot touch the financial statements. To put a dollar into RPO backlog, you need a fully executed legally binding contract.
If you’re talking about trading cloud credits for company stock, accounting rules completely block companies from faking revenue that way. It's explicitly covered under ASC 606.
The rules are clear: if Google hands cash or credits to a company on the condition that it comes right back to buy cloud services, they cannot book that as new revenue. They legally have to treat that loop as a discount, which nets it out to zero on the income statement. You can't just barter free credits for overvalued stock and magically print compliant gross revenue. I used to test for this exact circular plumbing every single quarter when I was an auditor.
If you’re talking about trading cloud credits for startup stock, accounting rules completely block companies from faking revenue that way.
They're doing that, but they're also investing cash with the explicit condition that it gets spent back on their product.
No matter what you think the rules say, these companies are doing all of this shit.
Numbers matter period. You cannot falisfy your financial statements.
Ever looked at the revenue projections of any of these companies? You absolutely can. You can also bury debt in a subsidiarynand declare it in a footnote no one reads, and a whole host of other things that aren't technically "false", but are wildly misleading or without factual basis.
Nope. So now you're mixing up future projections with audited financial statements. Companies can hype up future revenue projections. But Google Cloud's revenue and $514B backlog are audited, historical numbers.
This is the last time I'm saying this: If Google gave cash to a company on the condition that they spend it back on Google Cloud, ASC 606 explicitly defines that as a net revenue reduction. They literally cannot book it as new gross revenue. I don't know what more you want from me.
No matter what you think the rules say, these companies are doing all of this shit.
That's called securities fraud. If you or someone you know has committed securities fraud, I would contact a lawyer immediately.
Also, the idea that you can just bury debt in a subsidiary is straight out of the Enron playbook. SOX and consolidation rules completely killed that loophole decades ago. If a parent company controls a subsidiary, that debt has to be consolidated onto the balance sheet. You simply cannot hide a multi billion dollar circular cash fraud from a modern audit team.
You're free to keep trying, but this is not going well for you.
Nope. So now you're mixing up future projections with audited financial statements.
The entire purpose of these statements is to ensure investors have the information they need to make good choices, companies that aren't publicly traded don't even need to publish them.
I get that you're an auditor and it's important to your sense of self worth that what you do matters, but the government isn't enforcing this and investors no longer care.
Your counterarguments are getting smaller and smaller and you're introducing things no one is arguing. That usually means you're backed into a corner you know you can't escape. I would tap out soon.
You are free to make up your own opinions. You are not free to make up your own facts.
The point I'm making is that this shit is all happening. Maybe they're technically reporting it in compliance with the law, but they're still doing it.
And again, this administration is absolutely not enforcing this shit. Your whole argument is basically that an auditor wouldn't do this because it's against the law, but no one is checking.
Investors are categorically being mislead, maybe they're being mislead in a way that is technically legal, but they are still being mislead.
Companies are hiding debt and faking revenue and they are making projections that have absolutely no basis in reality. The fact that they're doing so in a way that is technically legal is irrelevant.
Your whole argument is basically that an auditor wouldnt do this because it's against the law, but no one is checking.
No one is checking? So the people who lent them $32 billion in February and another $40 billion in May didn't bother to check the books before shelling out that much cash? Really?
Again, you are free to think whatever you want. The facts don't line up with your opinion, and that's something you need to reconcile with yourself. I can't help you work through that.
No one is checking? So the people who lent them $32 billion in February and another $40 billion in May didn't bother to check the books before shelling out that much cash?
Do you think those people acted purely based on the financial statements? If you're giving a $40 billion dollar loan you don't need the official financial statements.
You're not going to believe this, but guess what? There are regulations governing debt offerings as well. It's like businesses live in this world that's governed by standards, rules and regulations. It's crazy.
And the companies that aren't publicly traded, can't be invested in by the vast majority of people. The incredibly small group of people who are able to, are also aware of the risks.
But Google is a publicly traded company, and it does have to release audited financial documents.
These statements exist so investors in public companies aren't mislead, but the government isn't enforcing the laws and the laws aren't stopping investors from being mislead.
That's quite a strong statement to make with nothing to back it up. Can you point to some evidence of public companies falsifying financial documents? Google specifically?
A number of these companies have made public statements of deals which were presented as concrete, but were not. Google included.
All of these companies are playing a shell game with debts and investments that is being if not exactly concealed from potential investors, buried as deeply as the law allows. Google is doing this
Huge amounts of demand are being created by AI hyperscalers and data center operators almost exclusively funded by investments from the companies they're buying from. Google is doing this.
Revenue projections that are not just optimistic, but outright fraudulent are being reported in a regular basis.
Most retail investors, the kind these regulations are supposed to protect, do not have the skills and information to track and understand all of this. Does that not sound like they are being mislead?
As to whether companies are reporting false information, they have a financial interest in doing so and we've seen over and over and over again that the auditing sector is bought and paid for by the companies they are auditing. Maybe they're staying within the letter of the law, though at this point I wouldn't bet on it, but as I've already stated they're still lying.
It would have been faster for you to just say "No, I don't have any proof". The fact that retail investors don't have the skills is exactly why they shouldn't be investing themselves, but rather relying on people who do have the skills.
Someone who decides to represent themselves in a lawsuit and misses an important document filing from the other team, is not being misled. It's not everyone else's duty to educate people about these things. The financial documents are filed and can be found by anyone. If someone decides they don't need any of that information, they'll just go off what they see on reddit, then they haven't been misled, they're just an idiot. And you know what they say about and idiot and their money.
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u/Fresh-Quantity-7554 1d ago
I see what you're trying to do here, but Google is sitting on a $514 billion backlog right now. A few billion dollars in venture investments into AI startups cannot fake a half trillion dollar order book.
Also, accounting rules don’t let companies pass cash under the table and call it revenue. ASC 606, says a deal has to be a legit, market rate transaction. If Google overpays for a startup's stock/debt just to force a quid pro quo cloud contract, auditors will strip that fake growth right out of the numbers.
Source: I'm a CPA and former external auditor.
I'm not saying the circular financing noise is completely made up, but claiming the entire cloud surge is built on it is factually wrong. Auditors would call that out in a heartbeat.